digits: Call It the Amazon Effect

In the Amazon era, even the sharpest online retailers are losing their edge. John Jannarone tell us how Williams-Sonoma is feeling the Amazon effect.

This transcript has been automatically generated and may not be 100% accurate.

... now ... don't amas on glaucoma is squeezing retailers in yet another way John Jannarone joins us on the site ... to tell us know what new way as I was on doing this reason ... will actually done five years ago or six years ago today and five and is on offer was called crimes to pay seventy nine dollars the year ... and you get free two-day shipping on those items and ... interesting Lee that was the same year that Williams Sonoma stop reporting specific figures for um it's the costs of revenue from shipping ... on ... the sport two years now ... aam ... and winsome offering very similar program for thirty dollars year and ... this is interesting because in the past winter was making money on shipping and now the fact that in this basin will we see happening at Amazon ... suggests they're they're losing money or if I would share an end and what is the number of premium ... brands company ... Adisseo thanks for expensive but ... a lot of money basically it's a it's a compromise and squeeze them yet here they are getting squeezed by MSN suite of course the last day wanting everything squeeze on shipping in particular has been Amazon's top C ... a long time ... to ... stop for these ... deals on shipping and beginning my were they were a lot of free shipping and of a lot of retailers have complained in Patagonia Dam ... at it you know ... more more of that owes it bought on ... the other one of the just recently bought but they've been adding a lot I can I get everything ... everything that I mean is it is this is basically open season on bricks and mortar retailers ... look like when someone leaves you focus on the sentiment in ... the story but it is a core supporters in archery ... it's not a piece of their two things says that Wall Street's for low prices ... oftentimes customers to pay sales tax ... in this issue ... but ... the wind that the reason I singled out when tsunami here is that you know it's ... it's amazing that a company that has this kind of brand power would have to give up on ... give of margin in order to hold onto its customers and these guys were way ahead of the pack and they have a very ... um ... longstanding catalog business so they did a very good job of shifting those customers into ... the online customers ... and ... you know you would've thought that they had a good nap old line on him this this people people by ... their pots and pans would ever do this but ... you know even when Sun online is to stand in response to you can imagine what's going on other retailers that haven't missed much progress leads to ... a question of what they do ... what's the solution ... for Rediff your wings have any up against Amazon was the solution you just get inside the tent ... and just go on Amazon and leave it at all or would just about where the white flag ... it's on to retreat ... now well I mean I think that I mean honestly I'd it's probably a good idea if or when somebody does this mean it's worked wonders for Amazon the only trouble is that ... it's not can do is much going Sonoma's it does for Amazon because Amazon was able to start when Sharon Alcon different categories he's the son of the prime Easter buying a razor blades toothpaste on Amazon and bought elsewhere OK what what what you what I saw a set of naifs from twenty Sinai well as that they deal ... with the thoughtful ... not that ... many throwing rises The the lead on the Sully's Union from Amazon ... the lane that ... Blackstone a huge win for smaller merchants again and again when they can't win on the Amazon ... site ... ALM ... so ... I guess I'm not sure if I'll ... I don't I know when renovating our house these could lead to the entire everything above Amazon Prime intellect of the vestibule back to ... the immunity due less to ship out that tell us about that but ... we got a huge amount of pictures ... the seventy nine year ... old lawyer shipping deal was an amazing yet that that that is that is amazing to me that the deal is this for the last lead-up but I'd I don't like this I ... mean this this idea about going with the use of these other social sites ... seems to be a reasonable weight on what he saw coming the NYSE's before Bill LivingSocial will reply was something that they made most of those sites are really special ... and to generally they don't target ... then I ... think the number is is this question is but let's be honest nobody does that suck ... up to half an hour and has to be one of these ... distressed ... debt agreed that most of what you see on my LivingSocial something maturing types leads to something more light ... on in the sky diving lessons are restaurant he wanted to try on ... a set ... of hands ... were there ... but he does is he trying ... to ... stop building was unoccupied but there is a Facebook page forty thing when I get done like BYD's they had to spend money there he had said they had any kind of I began a really good to me on ... intellect or so and so was the head of the stocks of the of the depot in some of their Facebook fan page long time ago I frenemy ... of ... France and it's a big number yet and it's not helping them tends to squeeze by Amazon knows if that is the key hit the loss ends and sort my thank you very much John